United States of America
before the
Securities and Exchange Commission

November 19, 2002

Public Utility Holding Company Act of 1935
Release No. 27603

Applications of Enron Corp. for Exemptions Under the Public Utility Holding Company Act of 1935
(Nos. 70-9661 and 70-10056)

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Order Denying Motion by Southern California Edison Company for Reconsideration

By Order dated November 5, 2002 (the "Order"), Southern California Edison Company ("Edison"), was authorized to participate on a limited basis in this proceeding.1 In accordance with Commission Rule of Procedure 210(c)(1), the Order granted Edison limited participation and directed, among other things, that Edison could not introduce or cross-examine witnesses absent leave to do so.

By Motion dated November 8, 2002, Edison seeks reconsideration of the Order to allow it to intervene as a party to this proceeding. In the event Edison is denied party intervention status, it alternatively seeks "clarification" regarding the scope of its participation. Specifically, Edison requests that its participation be "expanded to encompass participation in all procedures pertaining to the 3(a)(3) and 3(a)(5) exemption [under the Act] but not as to the 3(a)(1) exemption…." (Emphasis original.)

In support of its motion, Edison cites liberally to its March 26, 2002 motion to intervene2 for the proposition that Edison is acting on behalf of California ratepayer consumers. Edison acknowledges that in the "typical" case the "'investors or consumers' whom the Act was intended to protect and who may be affected by the outcome of the proceeding are those of the subject holding company or its utility subsidiary." Arguing that this case is "truly unique," Edison asserts that its "ratepayers have a direct interest in the Commission's determination of whether the application was filed by Enron in good faith" and concludes that it has demonstrated its entitlement to intervene as a party.

As the Order specifically noted, Edison's March 26 motion failed to establish a basis to allow it to intervene. Indeed, other than a passing reference to overpayments that its ratepayers may ultimately bear, Edison did not make any representation in its March 26 motion or supplement sufficient to warrant Edison's intervention. In its motion for reconsideration, Edison assert that it is acting on behalf of its ratepayer consumers. This assertion does not demonstrate, as required by Commission Rule of Practice 210(b)(1), why leave to participate under Rule 210(c) would be inadequate. The Division of Investment Management already opposes Enron's application and Edison's intervention would be merely cumulative.

Edison asserts that it presents the unique argument attacking Enron's good faith in the filing of Enron's applications. Pursuant to the October 7 Order, however, the issue for resolution is in fact whether Enron is entitled to an exemption, not whether the applications were filed in good faith or, to state it differently, whether a reasonable basis existed at the time the applications were filed for the claimed exemptions. Edison's request is denied for two reasons. First, I find that absent a final determination of entitlement to exemptions, the request is premature. After all, if Enron is entitled to an exemption, the lack of good faith claim may be refuted. Second, I find that judicial efficiencies are best served to defer the presentation of evidence or consideration of any motion regarding "good faith" until after a determination of whether there exists an exemption.

Based upon the foregoing, Edison's alternate request to expand the scope of its participation is unwarranted. Finally, in response to Edison's request for clarification as to the scope of its participation, Commission Rule of Practice 210(c)(1) contains a number of explicit limitations, and the Order provides for the submission of briefs, exhibits, evidence and other matters consistent with the limitations of Rule 210(c)(1). Accordingly, the motion must be denied.

IT IS ORDERED that, Edison's motion for reconsideration, be and hereby is DENIED.

By Order dated October 7, 2002 (the "October 7 Order"), the Securities and Exhange Commission ordered a hearing on Enron Corp.'s application for exemption from all provisions of the Public Utility Holding Company Act of 1935 (the "Act"), except for Section 9(a)(2). Holding Co. Act. Rel. No. 27574 (Oct. 7, 2002), 67 Fed. Reg. 63464. The October 7 Order contemplates a two-phase hearing: Phase I is for the limited purpose of determining whether Enron satisfies any of the particular criteria for an exemption under various sections of the Act. If a criterion for exemption is satisfied, Phase II will be for the purpose of determining whether granting an exemption to Enron would be detrimental to the public interest or the interest of investors or consumers.

In a footnote, Edison takes issue with the Order's reference to the "untimely" supplement that Edison filed on October 22, 2002. A review of the Commission's docket indicates that Commission's October 7, Order erroneously contained a deadline of October 22, 2002. Shortly following its discovery of this error, the Commission circulated a corrected October 7 Order (a copy was sent by facsimile to counsel listed in Edison's March 26 motion), which contained the correct October 21, 2002 date. In any event, the supplement was considered.